Estimation of the profit function of Trans log and the elasticity of input demand in rice farming in Jambi province

Abstract

This study aims to analyze the development of input and output prices, the translog profit function, and the elasticity of demand for lowland rice farming inputs in Jambi Province. The function model used is the Transcendental Logarithmic (Translog) profit function. The study results show that · The development of input prices has increased significantly every year. · The production input factors that affect the profitability of lowland rice farming are the price of seeds, TSP fertilizer, and other chemical fertilizers (KML). Other production factors such as urea fertilizer prices, pesticide prices, labor wages, and land rental costs are determinant factors. · The value of the elasticity of demand for inputs to their prices is elastic. All cross-price elasticity of demand is complementary and elastic. The value of the elasticity of input demand which is influenced by the price of rice shows a positive and elastic value. From the results of the study, it is expected that there will be capital assistance for farmers so that farmers can allocate optimal use of inputs.